A New Economy for a New Century.

In the 1890s, the American Press Association brought together the country's "best minds" to explore the shape of things to come in the twentieth century. As they looked ahead, the country's "futurists" were almost universally optimistic. Among the predictions that have held up well are the widespread use of electricity and telephones, the opening of the entire world to trade, and the emancipation of women.

Other forecasts proved to be naive, including the notion that people would live to be 150 and that air pollution would be eliminated. The dark sides of the twentieth century--two world wars, the development of chemical and nuclear weapons, the emergence of global threats to the stability of the natural world, and a billion people struggling just to survive--were predicted by no one.

Today, as compared to a century ago, faith in technology and human progress is almost as prevalent in the writings of leading economic commentators. Their easy optimism is bolstered by the extraordinary achievements of the twentieth century--including developments such as jet aircraft, personal computers, and genetic engineering--that go well beyond anything predicted by the most imaginative futurists of the 1890s.

But like their predecessors, today's futurists look ahead from a narrow perspective--one that ignores some of the most important trends now shaping our world. And in their fascination with the Information Age, many observers seem to have forgotten that our modern civilization, like its forerunners, is totally dependent on its ecological foundations.

Overcoming Adversity

Since our emergence as a species, human populations have continually run up against local environmental limits: the inability to find sufficient game, grow enough food, or harvest enough wood has led to sudden collapses in human numbers and, in some cases, to the disappearance of entire civilizations. Although it may seem that advancing technology and the emergence of an integrated world economy have ended this age-old pattern, they may have simply transferred the problem to the global level.

Oceanic fisheries, for example, are being pushed to their limits and beyond, water tables are falling on every continent, rangelands are deteriorating from overgrazing, many remaining tropical forests are on the verge of being wiped out, and carbon dioxide concentrations in the atmosphere have reached the highest level in 160,000 years. If these trends continue, they could make the turning of the millennium seem trivial as a historic moment, for they may be triggering the largest extinction of life since a meteorite wiped out the dinosaurs some 65 million years ago.

The Western economic model--the fossil-fuel-based, automobile-centered, throwaway economy--that so dramatically raised living standards for part of humanity during this century is in trouble. If it were to become the global model, and if world population were to reach ten billion during the next century, as the United Nations projects, the effect would be startling.

If in 2050, for example, the world has one car for every two people, as in the United States today, there would be five billion cars. Given the congestion, pollution, and the fuel, material, and land requirements of the current global fleet of 501 million cars, a global fleet of five billion is difficult to imagine. If petroleum use per person were to reach the current U.S. level, the world would consume 360 million barrels per day, compared with current production of 67 million barrels.

Or consider a world of ten billion with everyone following an American diet, centered on the consumption of fat-rich livestock products. Ten billion people would require nine billion tons of grain, the harvest of more than four planets at Earth's current output levels. With massive irrigation-water cutbacks in prospect as aquifers are depleted, and with the dramatic slowdown in the rise in land productivity since 1990, achieving even relatively modest gains is becoming difficult.

An economy is environmentally sustainable only if it satisfies the principles of sustainability--principles that are rooted in the science of ecology. In a sustainable economy, the fish catch doesn't exceed the sustainable yield of fisheries, the amount of water pumped from underground aquifers doesn't exceed aquifer recharge, soil erosion doesn't exceed the natural rate of new soil formation, tree cutting doesn't exceed tree planting, and carbon emissions don't exceed the capacity of nature to fix atmospheric carbon dioxide. A sustainable economy doesn't destroy plant and animal species faster than new ones evolve.

We are entering a new century, then, with an economy that cannot take us where we want to go. The challenge is to design and build a new one that can sustain human progress without destroying its support systems--and that offers a better life to all. The shift to an environmentally sustainable economy may be as profound a transition as was the Industrial Revolution that led to the current dilemma.

The Acceleration of History

Although the specific turning point that will be observed on January 1, 2000, is a purely human creation, flowing from the calendar introduced by Julius Caesar in 45 BCE, the three zeros that will appear on that day are powerful reminders of the passage of time--of how the pace of change has accelerated since the last such turning point, in the Middle Ages. The sweeping developments in the past century have all occurred in a period that represents just 1 percent of the time since humans first practiced agriculture.

The accelerating pace of change can be seen in virtually every field of human activity. In many ways, however, the defining economic development of this century is the harnessing of the energy in fossil fuels. In 1900, only a few thousand barrels of oil were used daily. By 1997, that figure had reached 72 million barrels.

We have also seen a vast increase in the use of materials, including growth in the use of metals from 20 million tons annually to 1.2 billion tons. The use of paper increased six times from 1950 to 1996, reaching 281 million tons. Production of plastics, largely unheard of in 1900, reached 131 million tons in 1995. The human economy now draws on all ninety-two naturally occurring elements in the periodic chart, compared with just twenty in 1900.

Among the most obvious accelerating trends is the increase in human mobility--a development the forecasters in the 1890s didn't anticipate. In 1900 there were only a few thousand automobiles in use worldwide; today there are 501 million. During the first half of this century, we went from the pioneering flight by the Wright Brothers in 1903 at Kitty Hawk, North Carolina, to jet aircraft that could fly faster than sound.

Engineers built the first electronic computers in 1946; in 1949, Popular Mechanics predicted that "computers in the future may have only 1,000 tubes and perhaps weigh only one and half tons." Today, the average five-pound laptop computer can process data faster than the largest mainframes available at mid-century.

The explosive growth of the Internet--expanding from 376,000 host computers in 1990 to more than 30 million in 1998 --has far surpassed the growth of heavy industry during its heyday. In the United States, an important threshold was crossed recently when the market capitalization of Microsoft passed that of General Motors, signifying the dominance of a new generation of technology. The number of telephone lines leapt from 89 million in 1960 to 742 million in 1996, while cellular phone subscribers rose from ten million in 1990 to 135 million in 1996. At the end of 1998, the world's first affordable satellite telephones went on the market, bringing the world's most remote regions into the ubiquitous information web. And the number of households with televisions went from four million in 1950 to just under one billion as the century closes, bringing the latest news and cultural trends to a global community. One outgrowth of the Information Age is what Economist editor Frances Cairncross describes as "the death of distance."

Aside from the growth of population itself, urbanization is the dominant demographic trend of the century now ending. In 1900, some sixteen cities had a million people or more and roughly 10 percent of humanity lived in cities. Today, 326 cities have at least that many people and there are fourteen mega-cities--those with ten million or more residents. If cities continue to grow as projected, more than half of us will be living in them by 2010, making the world more urban than rural for the first time in history.

Our growing population has required ever greater quantities of food, and growing incomes have led many societies to diversify and enrich their diets. These burgeoning food demands have been met by a continuing proliferation of new technologies, including the development of more productive crop varieties, the expanded use of fertilizer and irrigation, and the mechanization of agriculture. Grain use has increased nearly fivefold since the century began, while water use has quadrupled.

On the darker side, the twentieth century has also been the most violent in human history, thanks in part to technological "advances" such as airplanes and automatic weapons. Some 26 million people were killed in World War I; 53 million in World War II. Combined with other war deaths since the century began, the total surpasses the war casualty figure from the beginning of civilization until 1900.

Another major change that distinguishes the twentieth century is globalization--the vast economic and information webs that now tie together disparate parts of the world. By 10,000 years ago, our ancestors migrating out of Africa had settled not only the vast Eurasian continent but the Americas, Australia, and other remote corners of the world. It took most of the time since then, until the European Age of Exploration in the 1500s, for the world's distant peoples to be brought into more immediate contact with one another. And it was not until late in the nineteenth century that the development of steam-powered ships dramatically increased international trade. World trade has grown from $380 billion in 1950 to $5.86 trillion in 1997--a fifteenfold increase.

With the acceleration of history has come escalating pressures on the natural world--on which we remain utterly dependent, even in the Information Age. History will undoubtedly continue to accelerate, but if our descendants are to prosper, historical trends will have to move in a new direction early in the twenty-first century.

Rethinking Progress

As we approach the new millennium, many respected thinkers seem to believe that we are in for a period of inevitable economic and technological progress. Even the recent economic crisis that has spread misery from Indonesia to Russia is seen as a brief pause in an unending upward climb for Homo sapiens.

In a special double issue on the economy in the twenty-first century, Business Week ran a headline proclaiming, "You Ain't Seen Nothing Yet," forecasting even faster rates of economic progress in the century ahead. The magazine's editors expect the global economy to ride a wave of technology in the decades to come, solving all manner of social problems, as well as adding to the investment portfolios of its readers.

This view of the future, fueled by heady advances in technology, is particularly prevalent in the information industry. It reflects a new conception of the human species, one in which human societies are seen as free of dependence on the natural world. Our information-based economy is thought capable of evolving independently of the Earth's ecosystem.

The complacency reflected in this view overlooks our continued dependence on the natural world and the profound vulnerabilities this represents. It concentrates on economic indicators while largely overlooking the environmental indicators that measure the Earth's physical deterioration. This view is dangerous because it threatens to discourage the restructuring of the economy needed if economic progress is to continue.

If we are to build an environmentally sustainable economy, we have to go beyond traditional economic indicators of progress. If we put a computer in every home in the next century but also wipe out half of the world's plant and animal species, that would hardly be an economic success. And if we again quadruple the size of the global economy but many of us are hungrier than our hunter-gatherer ancestors, we won't be able to declare the twenty-first century a success.

Learning to Walk

One of the first steps in redefining progress is to recognize that our generation is the first whose actions can affect the habitability of the planet for future generations. We have acquired this capacity not by conscious design but as a consequence of a global economy that is outgrowing its environmental support systems.

In effect, we have acquired the capacity to alter Earth's natural systems but have refused to accept responsibility for doing so. We live in a world that has an obsessive preoccupation with the present. Focused on quarterly profit-and-loss statements, we are behaving as though we have no children. In short, we have lost our sense of responsibility to future generations.

Parents everywhere are concerned about their children. In their efforts to ensure a better life for their children, parents invest in education and medical care. But unless we now also assume responsibility for the evolution of the global economy, these short-term investments in our children's future may not amount to much; our principal legacy to them will be a world that is deteriorating ecologically, declining economically, and disintegrating socially.

Building an environmentally sustainable global economy depends on a cooperative global effort. No country acting alone can stabilize its climate. No country acting alone can protect the diversity of life on Earth. These goals can be achieved only through global cooperation that recognizes the interdependence of countries.

Unless the poorer nations' need for food, sanitation, cooking fuels, and other basic requirements are being met, the world's more affluent nations can hardly expect them to contribute to solving long-term global problems, such as climate change. The challenge is to reverse the last decade's trends of rising international inequalities and shrinking aid programs. In short, we can no longer separate efforts to build an environmentally sustainable economy from efforts to meet the needs of the world's poor.

According to various estimates, some 841 million people in the world are malnourished, 1.2 billion lack access to clean water, 1.6 billion are illiterate, and two billion don't have access to electricity. Forbes magazine estimates that the 225 richest people in the world now have a combined wealth of more than $1 trillion--a figure that approaches the combined annual incomes of the poorest one-half of humanity. Indeed, the assets of the three richest individuals exceed the combined annual economic output (measured at the current exchange rate) of the forty-eight poorest countries.

It is now becoming obvious that the widening gap between rich and poor is untenable in a world where resources are shared. In the absence of a concerted effort by the wealthy to address the problems of poverty and deprivation, building a sustainable future may not be possible.

Efforts to restore a stable relationship between the economy and its environmental support systems depends on social cohesion within societies as well. As at the international level, this cohesion is also influenced by the distribution of wealth. As communications improve and severely deprived people everywhere come to understand better their relative economic position, they are likely to take action to achieve a more equitable share of the economic pie.

In October 1998, the disenfranchised in the economically depressed southern part of Nigeria began taking over oil wells and pumping stations to protest their government's failure to use its vast flow of oil wealth to benefit people in the region. A villager noted that, even though oil had flowed out of the area for thirty years, his village still had "no school, no clinic, no power, and little hope."

Developing an Attitude

The trends of recent years suggest that we need a new moral compass to guide us into the twenty-first century--a compass that is grounded in the principles of meeting human needs sustainably. Such an ethic of sustainability would be based on a concept of respect for future generations.

The challenge may be greatest in the United States, where the per capita use of grain, energy, and materials is the highest in the world, and where in the 1990s half of all adults are overweight, houses and cars have continued to get larger, and driving has continued to increase, overwhelming two decades' worth of efficiency improvements. The world's ecosystems have largely survived 270 million people living like this in the twentieth century, but they won't survive eight billion or more doing so in the twenty-first century.

At issue is a change in understanding what values will support a restructuring of the global economy so that economic progress can continue. Although such a transformation may seem farfetched, the end-of-century perspective offers hope.

The past 100 years have seen vast changes in ethics and standards. The concept of human rights, for example, has flowered in the twentieth century. The basic principles of human rights have been around for several hundred years, but only in 1948--a mere half-century ago--did governments adopt a complex body of national and international laws that recognize these rights.

Another example of changing attitudes and values, one that has occurred even faster, is the growing understanding of the effects of cigarette smoking on health. This recognition has led to a sea change in public attitudes and policies toward smoking within a few decades.

A Blueprint for Success

Once it becomes clear that the existing industrial development model is not viable over the long term, the question becomes: what would an environmentally sustainable economy look like? Because we know the fundamental limits the world now faces and some of the technologies that are available, we can describe this new economy in broad outline, if not in detail.

Its foundation is a new design principle--one that shifts from the one-time depletion of natural resources to one that is based on renewable energy and that continually reuses and recycles materials. It is a solar-powered, bicycle/rail-centered, reuse/recycle economy--one that uses energy, water, land, and materials much more efficiently and wisely than we do today.

Although solar energy in its various forms has been widely considered a fringe source, it is now moving toward center stage. The use of solar cells to supply electricity is spreading rapidly, with sales climbing 17 percent annually. As of the end of 1998, some 500,000 homes--most of them in developing-world villages not yet connected to an electrical grid--were getting their electricity from solar cells.

Technologically, the most exciting advance comes from solar roofing material developed in the past few years. These solar tiles and shingles are made of photovoltaic cells that convert sunlight to electricity. They promise not only to create rooftops that become the power plants for buildings but to revolutionize electricity generation worldwide.

In 1997, British Petroleum announced that it was taking the threat of global warming seriously and was putting $1 billion into solar and other renewable energy resources. Royal Dutch Shell followed shortly thereafter, announcing a commitment of $500 million to renewable energy resources, with additional funds likely to follow. For energy companies interested in growth, it is not likely to be in petroleum, since, due to resource limits, oil production is projected to peak in the next five to twenty years and then begin declining.

As the cost of electricity from solar sources falls, it will become economical to electrolyze water, producing hydrogen. Hydrogen thus becomes a way of both storing and transporting renewable energy. A device called a fuel cell efficiently turns hydrogen back into electricity in automobiles or small power plants located in homes or office buildings. Several major oil and gas companies, including Royal Dutch Shell and Gasunie in the Netherlands, have begun to take an interest in hydrogen, while Daimler-Chrysler, Ford, General Electric, and Toyota are all investing in fuel cells. By the middle of the next century, hydrogen produced from solar electricity from the deserts of Arizona may be sent by pipeline to distant cities.

The notion of transport systems centered on bicycles and railroads may seem primitive at first, but this is because governments everywhere have assumed that the auto-centered transportation system was the only one to consider seriously. The unfolding reality, however, is quite different.

In 1969, the world produced 25 million bicycles and 23 million cars. And although car production was expected shortly to overtake that of bicycles, it actually fell further and further behind. In recent years, annual production of bicycles has averaged 105 million while that of automobiles has averaged 37 million. In contrast to the United States, where most bicycles sold are for recreational use, most of the 105 million bicycles sold each year worldwide are for basic transportation.

There are many reasons why bicycles have gained in popularity a century after the automobile was invented. One is that the number of people who can afford a bicycle is far greater than the number who can afford a car--and this is likely to be true for some decades to come. Cities are turning to them because they require little land, do not pollute, and reduce traffic congestion and noise.

In China, a group of prominent scientists has challenged the central government's decision to build an auto-centered transportation system, arguing that the country doesn't have enough land both to feed its people and to build the roads, highways, and parking lots needed for cars. The new economy will not exclude the automobile, because in many situations it is indispensable, but it is unlikely to be the centerpiece of the transportation system as it is in many nations today.

Replacing a throwaway economy with a reduce/reuse/ recycle economy is perhaps more easily understood than restructuring the transportation system because of the progress already made in recycling. Nonetheless, even with substantial recycling gains, the flow of garbage into landfills is still increasing almost everywhere in the world. We still have a long way to go in increasing material efficiency.

Some argue that it is possible to reduce materials use by a factor of four. Indeed, the Organization for Economic Cooperation and Development is investigating ways to reduce the use of materials in modern industrial societies by 90 percent. The overall challenge in manufacturing is to follow a new design principle, with services rather than goods as the focus. For example, Interface--an Atlanta-based firm operating in twenty-six countries--sells carpeting services to its clients, systematically recycling the worn-out carpets, leaving nothing for the landfill. The key is to gradually reduce the material throughout the economy, reducing energy use and pollution in the process. A concept known as eco-efficiency, with the goal of maximizing production while minimizing or, in some cases, eliminating effluents, is being pursued by companies around the world.

To the Future and Beyond

It is difficult to overstate the urgency of reversing the trends of environmental deterioration. Archeologists study the remains of civilizations that irreparably undermined their ecological support systems. These societies found themselves on a population or economic path that was environmentally unsustainable and were not able to make the economic adjustments to avoid a collapse. Unfortunately, archeological records don't reveal whether these ancient civilizations failed to understand the need for change or saw the problem but couldn't agree on the steps needed to stave off economic decline.

Today, the adjustments we need to make are clear. We know what we need to do. We have a vision of a restructured economy--one that will sustain economic and social progress. The challenge is to mobilize public support for the economic transformation. No challenge is greater or more satisfying than building an environmentally sustainable global economy--one where economic and social progress can continue not only in the twenty-first century but many centuries beyond. The question remaining is whether we can meet that challenge in time.

RELATED ARTICLE: Waste Not, Want Not

Imagine a truck delivering to your house each morning all the materials you use in a day, except food and fuel. Piled at the front door are the wood in your newspaper, the chemicals in your shampoo, and the plastic in your grocery bags. Metal in your appliances and your car--just that day's share of those items' total lives--are also included, as is your daily fraction of shared materials, such as the stone and gravel in your office walls and in the streets you stroll. At the base of the pile are materials you never see, including the nitrogen and potash used to grow your food, and the earth and rock under which your metals and minerals were once buried.

If you are an average American, this daily delivery would be a burdensome load: at 101 kilos, it is roughly the weight of a large man. But your materials tally has only just begun. Tomorrow, another 101 kilos arrive, and the next day, another. By month's end, you have used three tons of material, and over the year, thirty-seven tons. And your 270 million compatriots are doing the same thing, day in and day out. Together, you will consume nearly ten billion tons of materials in a year's time.

Massive flows like these are a key feature of what has turned out to be a century unique in its use of materials. The scale of materials use by Americans, Europeans, Japanese, and other industrial-country citizens dwarfs that of a century ago--or, for that matter, of any previous era. Consumption of metal, glass, wood, cement, and chemicals in industrial countries since 1900 is unprecedented, having grown some eighteenfold in the United States alone.

From this global river of materials, a stunning array of new products have emerged: skyscrapers, plastic bags, compact discs, contact lenses, ballpoint pens, and spacecraft, to name a few. Most of these products--and most of the world's materials--are consumed in industrial countries; the United States alone uses a third of world materials today. But developing countries are also steering their economies onto materials-intensive development paths. Indeed, the widespread human appetite for all materials has defined this century in much the same way that stone, bronze, and iron characterized previous eras.

These huge flows, however, are not simply expanded versions of the smaller movements of materials that built previous civilizations. Today's materials are more complex and toxic than ever, drawing from all ninety-two naturally occurring elements instead of the twenty or so in use at the turn of the century. This larger range of choices enables scientists to move beyond classic building blocks--wood, ceramics, and metals--as they develop new materials. Advances in polymers, for instance, spurred the development of plastic, a material as common today as wood was at the dawn of the century. And silicon--essentially sand, the most common element in the Earth's crust--vaulted from a humble building material to the central ingredient in complex products like computer chips.

But because industrial economies were not tooled for recycling, massive materials use in this century also generated huge flows of waste. Waste is as old as settled life, but the scale and toxicity of waste production in modern times is unprecedented. Indeed, by one estimate, the vast majority of materials moving through industrial economies are used only once, then disposed of. This one-time use contrasts sharply with the practice in earlier eras, when organic materials naturally degraded, and when metal products were used for years before being melted down and transformed into new products.

The massive flows, complex makeup, and unparalleled waste that characterize this materially unique century have also wrought extraordinary damage on human and environmental health. Mining has contaminated more than 19,000 kilometers of rivers and streams in the United States alone, and logging contributes to habitat loss, a primary cause of the mass extinction of species that scientists believe is under way. Air and water pollution from manufacturing plants have sickened millions and threaten many more: one quarter of the Russian population, for example, is exposed to pollution concentrations that exceed health standards by ten times. Some of the 100,000 synthetic chemicals introduced this century are ticking time bombs, affecting the reproductive systems of animals, including humans, even a generation after initial exposure. And the effort to make waste disappear--by burying it, burning it, or dumping it in the ocean--has boomeranged, generating greenhouse gases, dioxin, toxic leakage, and other threats to environmental and human health.

This reckless abuse of the natural environment is the product of a "frontier" mindset that views materials, and the Earth's capacity to absorb wastes, as practically limitless. Natural as this perspective may have seemed in the nineteenth century, it led to an industrial system that, by hitching progress to materials consumption, became increasingly disruptive. At great expense, and using tremendous quantities of climate-altering fossil fuels, industrial economies destroy natural landscape and habitat to extract raw materials for products such as soda cans and grocery bags, often of little value, whose useful life may be measured in mere minutes. Soon, they are discarded in ways that contaminate land, water, or the atmosphere. Then the cycle begins again. Given this record, an extraterrestrial observer might conclude that conversion of raw materials to wastes is a major purpose of human economic activity.

Thoughtful analysis of industrial societies suggests that much of this wasteful activity is unnecessary to provide people with the services and experiences they desire--which makes the current system all the more archaic. If shelter, transportation, education, entertainment, and other human needs can be met with a minimum of materials, especially virgin materials--as innovative new experiments strongly suggest--a new economy and a new understanding of human development will emerge.

The key to reducing materials flows is to abandon frontier economics, which yokes economic activity to materials use. This will require imaginative initiatives and leadership: restructuring economies to focus more on the delivery of services and less on the creation of products; extending the productive life of products and building them for easy recycling or remanufacture; linking industries so that wastes from one factory become the inputs to another; and persuading consumers of the benefits of consumption habits geared toward personal growth rather than excess. These far-reaching, even revolutionary initiatives offer a new industrial vision for a new century: bringing economies into harmony with the natural world on which their survival depends.

Gary Gardner is a senior researcher and Payal Sampat is a staff researcher at the Worldwatch Institute. This material is adapted from the introduction to Mind Over Matter: Recasting the Role of Materials in Our Lives (Worldwatch Paper 144).

Lester R. Brown, the 1991 Humanist of the Year, is president and Christopher Flavin is senior vice-president of the Worldwatch Institute, a Washington, D.C.-based research institute. This article is adapted from State of the World 1999 Millennial Edition, which can be purchased for $13.95 plus shipping from Worldwatch by telephone at [phone], by e-mail at [e-mail], or via the Web at www.worldwatch.org.